intellectual-property, valuationIf you are given, say, 10% equity in the IP of an invention, and suppose it gets patented and is the basis for a new company, do you still own 10% of that company ?
My guess is no, you just own the IP. IP is only one component of a company valuation (which includes assets, customer lists, equipment etc.).
Let’s assume IP is worth 4% of the valuation.
It seems that you would then own 10% of 4%, resulting in 0.4%.
Any thoughts?
Simple answer no.
You would simply co-own the IP with that company.
However you run straight into a hurdle of decision making over exploiting that IP and how it was licensed to that company. In fact you would probably need to form a company to own the IP, and be a 10% shareholder in it, then license it to the other company. This then causes a problem for the trading company, because it doesn’t own that asset that makes up a large part of its worth. It might be better to sell your stake in the IP to the company for the right to earn a royalty, or to take a shareholding in the main company, depending on your on-going interest.
All content is licensed under CC BY-SA 3.0.